During an Oct. 31 conference call to discuss Invacare’s results for the third quarter, Monaghan, chairman, president and CEO, outlined a three-phase transformation that he believes will, ultimately, land the company with more than $1.1 billion in net sales on a constant currency basis and with gross profit of more than 30%.

“I want to put today’s quarterly release in the context of the plan we’re executing to our investors and prospective investors, so you can more easily understand the long-term value being created,” he said.

Invacare reported a net loss of $5 million for the third quarter of 2016 compared to $7.8 million for the same period last year. It reported net sales of $268.1 million vs. $283.8 million. The company reported a net loss of $25.2 million for the nine months ended Sept. 30, compared to $23.3 million for same period last year. It reported net sales of $800.7 million vs. $859.1 million.

Monaghan says Invacare is currently in the first phase of the transformation, which entails strengthening the balance sheet, developing and expanding talent, accelerating quality efforts, strengthening the North America commercial team, shifting product mix and restarting the innovation pipeline.

Invacare has made progress in this first phase of the transformation, Monaghan says, as evidenced by the successful sale of its Garden City Medical business, as well as its launch of two new products, the LiNX control system in Europe, a wirelessly programmable complex power wheelchair control system; and the Alber Twion power assist device for active manual wheelchair users.

Monaghan says this first phase of the transformation has been “especially intensive” on the North America HME business, which saw net sales of $98 million for the third quarter, a 14.5% decrease, and net sales of $314 million for the first nine months of the year, a 12.5% decrease.

To relieve some pressure, Monaghan says Invacare made the tough decision in October to “right-size” certain parts of the North America HME business in line with shifts in staffing needs, a move that is expected to save about $2.6 million annually.

Until Invacare completes the third phase of its transformation sometime in 2019, Monaghan acknowledges that “not every quarter is going to be smoothly interpolated between where we started and where we’re going.” “In terms of metrics, by analogy, this is going to be more of a walk through a forest to a destination than a walk in a straight line,” he said.